Jasper County Democrat, Volume 15, Number 43, Rensselaer, Jasper County, 31 August 1912 — PRESENT TARIFF FOSTERS FRAUDS [ARTICLE]

PRESENT TARIFF FOSTERS FRAUDS

Domestic Cotton Fabrics Sold Americans as “Imported.” CHEATING THE CONSUMER Leas Than 2 Per Cent Comes From Abroad, but Americans Pay Exorbitant Price For Home Goods Because of Deception and Prohibitive Tariff. By ROBERT KENNETH MACLEA, [Formerly consulting expert of the tariff board.] New York, August.—The prohibitive tariff, revised upward by the Aldrich law, permits and fosters wholesale frauds upon the American consumer of cotton goods. Less than 2 per cent of the cotton fabrics consumed in the United States comes from abroad, because the protective duties have been madejso high that importation is unprofitable. Yet fully one-third of the cotton piece goods going over retail counters is sold as “IMPORTED” or under names implying a foreign origin. This deception Is generally perpetrated upon the consumer for the purpose of obtaining exorbitant prices for domestic goods. The consumer believing the goods are Imported and knowing that the tariff adds excessively to cost, pays 50 to 100 per cent more than a fair price and does not suspect that he is being cheated. Drains the Pocketbook. Let us go straight to a specific example of the operation of this fraud. Take the tariff board’s cloth sample No. 56, described as a “printed dimity.” This is a medium priced cotton fabric known to almost every American housewife. What woman or girl hasn’t possessed a dimity dress within the last few years? And if she went to the cotton goods counter and bought the material by the yard she no doubt saw such signs as: *<•*< 1111111111 1 1 111 lllj 4. IRISH DIMITY, 4 f J •W-I-++F4-F+4-4-4”{--I-I-f++++++*F++4' The World’s tariff editor visited with me a department store in a New England city of 100,000 Inhabitants and found recently a counter piled with these goods, placarded: X REAL IRISH DIMITY, J X 19 eta. We procured samples of all of them. There was not one piece of imported goods in the lot. Investigation proved that the store buyer had purchased these “Irish” dimities from a Boston jobber at 10 cents a yard and that they were made in a New England mill. Here was a supposed “bargain” in a supposedly “imported” fabric, on which the retailer was taking a profit of 90 per cent! This happens to be a fabric representing ihe highest efficiency in American manufacturing. It is a class of goods in which we can compete advantageously with any country in the world. The tariff board's investigations discovered on sample No. 56 an American cost of production of 7 1-3 cents a yard. In all the mills investigated the board’s representatives found that the low and high costs of manufacture of this fabric did not vary half a cent a yard. Who Gets the Profit? The manufacturer of this American dimity, that is sold as “imported” and “Irish,” does not get the excessive profit In some instances the manufacturer does, but here he sells to'the jobber at 8 cents, taking only a nom- | Inal manufacturing profit of two-thirds cent a yard. The jobber sells to the retailer at 10 cents, a 25 per cent margin for the jobber. In Canada, with 25 per'cent tariff a cotton fabric costing 10 cents a yard would be sold to the consumer at 1 9 12, or sometimes at 15 cents if the pat-

tern happened to be in special demand In the United States, with iti prohibitive tariff, the retail price is always much higher. The standard price retail is 15 cents for the fabric wholesaled at 10. But when the tariff is excessive^—it is 54 - per cent on this printed dimity—the dishonest retailer can get away with” the deception and double or more than double his normal profit by selling’the domestic article as imported.” The retailer knows that he could not buy a genuine imported dimity of this quality from a foreign manufacturer’s agent in New York for less than 15% or 16% cents, and the trade would retail this at 25. He compares the domestic and foreign fabrics and finds the American made is equal in every respect to the fabric from abroad. So he says to himself, “M by not sell it as foreign goods at a price will make it attractive?” The extent of this deception is not realized by the majority of manufacturers, but some mills—usually those that have cried loudest and worked most insistently and quietly for excessive duties-—have been and are parties to this fraud by labeling their goods or permitting them to be labeled by their selling agents “Imported.” Mill Man Pockets It.

In some cases the manufacturer takes the tariff favor for his own pocket. Tariff board sample No. 34 illustrates this. No. 34 is a fancy white goods used for dress wear. Its manufacturer encountered a fair des mand for this material during the past season. Table No. 169 of the tariff board s report shows a manufacturing profit of 90 per cent. It costs to manufacture this cloth 12.16 cents a yard. The mill refuses to sell to any one excepting the jobber, and through this channel the cloth reaches the retailer at 22% to 25 cents a yard. The retailer charges the consumer 35 to 39 cents, For comparison take the value of the fabric on weight. At the manufacturing cost of 12.16 cents a yard one pound of this goods is worth $1.23 as it leaves the mill. When it reaches the consumer (at 39 cents a yard) the price has been boosted to $4.20 a pound. The manufacturing cost of this cloth in England is practically the same as here, yet the English manufacturer sells it for 15.44 cents a yard, the jobber at 17.26 cents and the retailer at 22 cents. Bear in mind that the "difference in cost of production at home and abroad tn this class of fabric represented by sample No. 34 amounts to nothing, but the Payne-Aldrich tariff on it equals 55.89 per cent, or 8% cents per running yard. Fancy goods of the type of sample No. 34 are products of the Lippitt-Mc-Coll class of mills. The Payne-Aldrich bill raised the duty on this cloth from 35 to 55.89 per cent. Is it any wonder that Senator Lippitt and Mr. McColl were interested in amending the Payne bill while it was in Senator Aldrich's committee when such amendments would permit them to take a manufacturer’s profit of 90 per cent?—New York World.